Owens Corning's Enterprise System Struggle
Owens Corning's Enterprise System Struggle
In the early 1990s Owens Corning was a United States leader in the production and sale of such building materials as insulation, siding, and roofing, but management wanted the company to grow. The company had only two possible paths to growth: offering a fuller range of building materials, and/or becoming a global force. To increase its range of products Owens Corning decided to acquire other companies. To become a global force, management realized the company would need to become a global enterprise that could coordinate the activities of all of its units in many different countries. Headquartered in Toledo, Ohio, Owens Corning had been divided along product lines, such as fiberglass insulation, exterior siding, roofing materials. Each unit operated as a distinct entity with its own set of information systems. (The company had more than 200 archaic, inflexible, and isolated systems.) Each plant had its own product lines, pricing schedules, and trucking carriers. Owens Corning customers had to place separate telephone calls for each product ordered---one each for siding, roofing, and insulation. The company operated like a collection of autonomous fiefdoms. Owens Corning management believed that implementing an enterprise system could solve these problems. The company selected enterprise software from SAP AG to serve as the foundation for a broad company overall. "The primary intent with SAP was to totally integrate our business systems on a global basis so everyone was operating on the same platform with the same information," answered Dennis Sheets, sourcing manager for the insulation and roofing business. Sheets wanted to centralize purchasing. "Prior to
SAP," he said, "we were buying widgets all over the world without any consolidated knowledge of how much we were buying and from whom. Now [using SAP's R/3 software] we can find out how many widgets we're using, where they're being purchased, and how
In the early 1990s Owens Corning was a United States leader in the production and sale of such building materials as insulation, siding, and roofing, but management wanted the company to grow. The company had only two possible paths to growth: offering a fuller range of building materials, and/or becoming a global force. To increase its range of products Owens Corning decided to acquire other companies. To become a global force, management realized the company would need to become a global enterprise that could coordinate the activities of all of its units in many different countries. Headquartered in Toledo, Ohio, Owens Corning had been divided along product lines, such as fiberglass insulation, exterior siding, roofing materials. Each unit operated as a distinct entity with its own set of information systems. (The company had more than 200 archaic, inflexible, and isolated systems.) Each plant had its own product lines, pricing schedules, and trucking carriers. Owens Corning customers had to place separate telephone calls for each product ordered---one each for siding, roofing, and insulation. The company operated like a collection of autonomous fiefdoms. Owens Corning management believed that implementing an enterprise system could solve these problems. The company selected enterprise software from SAP AG to serve as the foundation for a broad company overall. "The primary intent with SAP was to totally integrate our business systems on a global basis so everyone was operating on the same platform with the same information," answered Dennis Sheets, sourcing manager for the insulation and roofing business. Sheets wanted to centralize purchasing. "Prior to
SAP," he said, "we were buying widgets all over the world without any consolidated knowledge of how much we were buying and from whom. Now [using SAP's R/3 software] we can find out how many widgets we're using, where they're being purchased, and how